Category : Taxation

Taxation News Traffic

Own a Spanish vehicle? Road tax 2021

By dneutiens@segurantis.com

Think of your traffic load

If you have a vehicle in Spain immatriculated in your name then, as every year , it is time to pay the road tax 2021. This applies to cars, mopeds and all other vehicles with a Spanish license plate. Do you have this car registered in the province of Valencia then it is SUMA who is responsible for collecting these taxes.

Below we show you how to pay this tax if it is not done automatically. If you want a step-by-step guide, do not hesitate to download our brochure of which we provide the link in our website below.

FORMAS-DE-PAGO-SUMA-2021Download

Link to how SUMA pay online:

Suma pay online - Manual

The SUMA calendar

On the SUMA website you can check when your specific region is due to collect the various municipal, regionaland national taxes.

What can Segurantis do for you?

Go to the overview of our services.

Taxation News Resident

Modelo 720 - last update 16-01-2022

By dneutiens@segurantis.com

You live in Spain? Think about the wealth tax or the modelo 720!

If you are resident in Spain then you as an expat or foreigner who is resident in Spain are obliged to declare any capital outside of Spain that exceeds 50.000,00 euro. This is done in Spain through the 'modelo 720' - Declaración informativa sobre bienes y drecechos situados en el extranjero - or tax form 720. This form must be handed in before March 31st and serves in principle as information for the Spanish tax authorities.

What is the model 720?

'Modelo 720' can be described as tax form 720 which is an annual obligation under conditions. It is a declaration that must be completed if you have foreign assets that exceed 50.000,00 euros in following 3 categories:

1st category: bank and traditional savings accounts - all cash accounts that you can access immediately when needed

2nd category: holdings - shares, funds, bonds, life insurance policies, pension funds and temporary interest rates

3rd category: immovable property: property or rights to immovable property (in possession, by purchase, inheritance or gift)

If the stated amount of EUR 50,000 is not exceeded (for each category separately), one is exempted from the obligation to provide information about affairs and rights abroad.

After the first declaration, one only has to submit the modelo 720 in the following years if the balance in one of the categories has changed by a value of 20,000 Euros compared to the previous declared values in the declaration(s) already made. Some examples why your situation may have changed:

  • You have sold or bought a property abroad
  • Your investments have matured or been sold
  • You have a life insurance payment
  • You have opened or closed a bank account
  • In one of the categories, the value has risen above EUR 50,000.00
  • …

Why the 720 model?

This declaration is an amendment to the tax code as part of the regulations aimed at prosecuting fraudulent activities in Spain. Since 1 January 2013 it is compulsory to provide information about the assets and rights that a person has abroad.

Who should submit this statement? 

All (natural) persons resident in Spain and staying longer than 183 days as well as foreign companies and commercial establishments have to fill in the form. The condition is, however, that the amounts involved in each category are in excess of 50,000 Euros.

If you have never submitted a Form 720, but you know that you have assets in one of the above-mentioned groups where the minimum amount has been exceeded, it is extremely important that you still declare it. The penalties for failure to do so can be up to €10,000 or more.

Suppose you are the heir of someone who has declared the model 720 in the past, then you have a duty as an heir to inform yourself and share information about the extinction of this or these asset classes.

When to submit?

The declaration must be made between 1 January and 31 March. It is important that the form is filled in correctly and on time because incomplete or late returns can result in very high fines.

source - https://www.agenciatributaria.es/AEAT.internet/Modelos_formularios/modelo_720.shtm

Tax return?

This model does not involve paying tax. However, if the total capital (domestic + foreign) exceeds a certain limit (we will take EUR 700,000.00 as the basic criteria), annual wealth tax will have to be paid. If this is the case for you, please contact us for more information.

Penalties and fines?

Although the Model 720 is intended purely as information, failure to do so can result in a heavy fine, ranging from EUR 10,000 to 150% of the undeclared value of the foreign asset. If the declaration is submitted too late (after 31 March) or not correctly and completely filled in, then this can also be fined with 1.500 euros or more. It is therefore important for Spanish residents with assets in another country to comply with Modelo 720.

There has been a lot of discussion about these declarations but they now appear to be off the table (anno 2022). The only thing that was not correct according to the EU was the amount of the fines for not declaring or declaring incorrectly but these are now in line with what the EU prescribes. Where previously the fine could be up to 150% of the undeclared value, this may now be no more than 50% and the formal or usual fines circulate around EUR 150 to EUR 250 per undeclared asset. Crimes against this tax declaration will also expire after four years, although we would take this with a grain of salt.

How to submit?

Do you want to know if you are eligible for this declaration? Segurantis helps you with this. You can freely use our "Declaration checker" via the button below:

If you have come to the conclusion that you are eligible for this declaration or that a change needs to be made to a previous declaration or declarations, please contact us. We will then inform you of our rates for completing this tax obligation. For your information: 15 March is the last day on which you can come to us with your information. Requests made after that date will not be processed.

Taxation News

Do I have tax obligations if I leave Belgium and live elsewhere?

By dneutiens@segurantis.com

An article by Segurantis published in Flemings in the World on 27/01/2021.

Segurantis regularly contributes to Flemings in the World.

You have decided to settle elsewhere. Wherever in the world you want to live is not a restriction in itself and many Belgians have gone there in recent years. Among the favourite holiday destinations of Belgians, France, Spain, Italy, Germany and Portugal are the favourites. This choice is also regularly seen once a decision has been made to settle elsewhere.

In most cases, Belgians emigrate mainly for economic reasons, i.e. for work. But Belgians also choose the warmer climate of the South. Especially retirees prefer the warmer weather to the inclement rainy scenario with an average of 199 days of precipitation per year (annual average in Belgium)[1].

Spain, a top seller among the Belgians

In this article we are going to focus on the Belgians who are retired or receiving benefits and who have settled abroad, but specifically in Spain. In other words, the Belgians who emigrated and still have some kind of income from Belgium. There is certainly an increasing trend that many retired or nearly retired people choose Spain as their country of residence to enjoy their retirement and leisure time[2].

The climate and facilities offered by the country are an attraction for the older generation as well as for people with physical problems or disabilities. Also the stable political system, the lower consumer prices for goods and the safe atmosphere make Spain very popular with our compatriots. In recent years, even more and more younger families choose Spain as a new location to settle. Viva España[3].

Administration on departure and arrival

Relocating your place of residence involves a lot of things. There are a number of administrative obligations which must be met in your country of residence before you can take the car or plane to live elsewhere. You cannot just close the door behind you and leave, you will have to deregister and inform the necessary administrative services in your municipality.

Especially for pensioners, it is important to clearly inform the services such as the municipality, the pension service, thetaxes and the services that manage your health care about your departure and where you will settle. You don't want to run the risk of not being entitled to social security in the country of your choice because you didn't take the right steps before you left. Or that once you arrive in your new country of residence, you will no longer receive a pension because they do not know where you will be resident for tax purposes in Belgium? Good preparation before your departure prevents problems afterwards.

You can count on help

Once your departure is finalised, there will of course be the administrative shop in the country where you will be settling. Some countries facilitate these administrative matters in a fluent orderly manner. You will often be addressed in English or French as the common language and you will soon be registered as resident. However, there are also countries where this administrative process is not so smooth and you may be sent from pillar to post because you do not have the right papers at the right time.

Especially in the southern countries, newcomers can sometimes be unpleasantly surprised if they have not first studied the working methods and culture of these countries. A good advice bureau or administrative office that knows the country but also understands its inhabitants is often the solution to get you registered correctly, quickly and without many hiccups so that you are a recognized resident of the country where you want to live. These offices can help you with your residency and your social security so that you are also helped in case of illness.

You are registered in your new country of residence, you are registered with the local social security and you have registered with the consulate. Once all this is done, the annual obligations come and they are mainly situated in the fiscal area.

Annual tax obligations

Every year there are tax obligations which residents (fiscal residents) within Spain have to keep in order. For somebody who lives in Spain and has an income partly or completely coming from another country, there will be tax obligations in the country that pays out the income. Between Spain and Belgium there are agreements to avoid double taxation, however this does not mean that you do not have to submit your tax return or other tax declarations to both countries[4]. Failure to do so may result in both Spain and Belgium claiming the tax. This is a subject on which there is a great deal of uncertainty and confusion , but one that is being strictly monitored by both countries. To know what you should do, we briefly explain below.

Who's paying me?

The first question you need to ask yourself in order to verify whether you still need to file a tax return in Belgium (as a natural person) if you are domiciled abroad is: Where is the origin of my income? Who or what department pays my income? This can be the following income:

  • A wage
  • A pension
  • Rental income
  • Independent activity
  • …

If Belgium is still the country of origin of your income , you will have to declare this income and you will have to register in the non-resident tax return so that you can complete this tax return. If you have no income from Belgium, you do not have to submit a tax return and you are not taxable in Belgium. You must also report any changes in your family situation via this non-resident tax return.

Since we are talking about the group of pensioners in this article, we will explain below what pensions can be[5]:

  1. Pensions and annuities paid or granted by a resident of Belgium, by a public or private institution or company established in Belgium or by a Belgian establishment of a non-resident
  2. Pensions, annuities and allowances paid or granted by a non-resident, if:
  3. the contributions to the pension, annuity or allowance have given rise to a tax advantage for income tax purposes for the debtor of such contributions, or
  4. the professional activity by virtue of which the pension was paid or the allowance was granted was wholly or partly carried out in Belgium

Whether or not you have to pay tax depends on your situation, the income and the country where you live. In certain cases, Belgian income is exempt from tax in Belgium, which means that even if you file a tax return that mentions the income, you do not have to pay tax.

I live in Spain, I receive income from Belgium, what should I do and where do I pay taxes?

If you have a pension from the private sector or from a public body which exercises a commercial or industrial activity (SNCB, Bpost, Belgacom, etc.), you do not have to pay tax in Belgium on your Belgian pension. You must fill in Box I, Box III and Box XIII in the non-resident tax return and you must be especially careful not to fill in Box VI.

If you have a pension from the public sector (as a former civil servant or contracted civil servant) and you do not have Spanish nationality, your pension remains taxable in Belgium and you must fill out Box I, Box III, Box VI (your Belgian pension) and Box XIII for any income not of Belgian origin.

To conclude

We are writing about a subject that, from experience, is not the most popular subject for discussion. We have noticed from conversations with clients, from communication with the Belgian departments responsible for the non-resident tax return and via seminars that a lot of inaccuracies and half-truths are circulating. It is a subject that people push away.

The fact that you file your tax return in Spain is one point and that is usually emphasized by groups among themselves but also by offices that keep the annual Spanish tax return in order. But it does not stop there. It is important that you are assisted by professionals who maintain knowledge and relations with the Belgian authorities as well as being aware of the fiscal landscape in Spain. Belgium pays your income and is also responsible for your social security in Spain, so do not underestimate the importance of keeping your administration in order in Spain as well as in Belgium.

This article was written by Dimitri Vincent Neutiens, partner and founder of Segurantis. Segurantis is an Expatgestoria specialised in services for Belgian and British expats. Dimitri has enjoyed a training as an accountant in Belgium and can help you with the application and filing of these declarations. For everything that has to do with Spanish declarations Segurantis works together with recognised Spanish tax specialists and lawyers. For more information don't hesitate to contact us via the website or ask your question directly via info@segurantis.com.

You can read the article on the website of Vlamingen in de Wereld:

Find out more about Segurantis' tax services:

[1] Source: https://www.meteobelgie.be/klimatologie/waarnemingen-en-analyses/jaar-2018/2210-jaa-2018

[2] Source: https://www.viw.be/nl/beste-belgen-het-buitenland-wie-zijn-jullie-en-waar-wonen-jullie

[3] source: https://www.wereldreizigers.nl/wereldwijs/veiligste-gevaarlijkste-landen-europa/

[4] Source: https://spain.diplomatie.belgium.be/nl/consulaire-diensten/diensten-spanje/madrid/dubbel-belastingverdrag-tussen-belgie-en-spanje

[5] https://financien.belgium.be/sites/default/files/downloads/111-niet-inwoners-deel-1-toelichting-2020.pdf#page=7

Expatgestoria Financial Taxation Legal News

Were you stuck in Spain during the lockdown?

By dneutiens@segurantis.com

Were you stuck in Spain during the lockdown? Then avoid paying taxes in Spain as well.

On 14/03/2020 there was a unanimous decision of the 50 provinces that Spain went into lockdown. If, because of these restrictions, you have resided in Spain for more than 183 days, even if it is not your country of residence, Spain will count you as a tax resident. The Spanish tax authorities therefore do not take into account that the lockdown affects your stay and refer to article 9 of the Personal Income Tax Law (Ley de IRPF).

In Spain, tax residence is determined according to criteria such as tax periods and calendar year, in general:

  • Any person who resides in Spanish territory for more than 183 days during the calendar year, regardless of consecutive or interrupted.
  • Spain is the main source of economic activity or interest, directly or indirectly.
  • When the person in question does not live in Spain himself, but the ex-partner from whom he is not legally separated and possibly the minor children do live in Spain.

If you find yourself in one (or more) of these situations then Spain may hold you liable for income tax and you will be taxed in Spain on your worldwide income. Spain will then consider you both tax resident (subject to Spanish tax liability) and legal resident (subject to Spanish law). In the event that you are notified of this tax liability, make sure that you can prove that you are subject to tax in another country.

Doubts have been raised about the interpretation of the application of this law and, again, Spain appears to be going its own way. The OECD (Organization for Economic Co-operation and Development) had made recommendations to its members on this subject, which countries such as the United States, the United Kingdom, Ireland and Australia, have adopted. Several countries will respect the recommendation however in Spain there is no distinction made as to whether the period of stay was voluntary or involuntary.

Our goal at Segurantis is "to be on top" regarding these tax obligations and to keep our clients informed of what is going on in the Spanish tax landscape.

Source:

https://www.europapress.es/economia/fiscal-00347/noticia-hacienda-obliga-extranjeros-atrapados-espana-mas-183-dias-confinamiento-tributar-aqui-20200925113920.html

We are here to help you

At Segurantis we work closely with local authorities and the Belgian/Dutch state. This way we try to assist you in case of questions and help you where we can. If you would like us to take care of your tax file in Spain please do not hesitate to contact us.

Expatgestoria Financial Taxation News Properties

End of discrimination for Belgians with a 2nd home abroad?

By dneutiens@segurantis.com

Article published in Flemings in the World - December 2020

This is not the first time that Belgium has been convicted by the European Court of Justice of unequal treatment of Belgians with a second residence abroad. Our country was condemned once for this in 2017 and a second conviction followed in 2018. The sanction was a fine of 2 million euros and a daily penalty of 7,500.00 euros as long as the Belgian tax authorities tax the rental income of domestic and foreign residences differently.

Read it full article published in VLAMINGEN IN THE WORLD.

Taxation Legal News Properties Rent out

Lettings in Spain - What about costs?

By dneutiens@segurantis.com

Are you renting out your property in Spain? What costs can you deduct?

You are a non-resident who rents out his property(s) on a regular basis at short notice for the purpose of holiday rentals. From the moment you receive compensation for this, you are obliged to keep a number of legal matters in order (fiscal and legal) including the declaration of rental income, the administrative obligations in this respect and the payment of taxes due.

This declaration is only made if you have let in a certain quarter of the current calendar year. If you have not let, you do not submit a declaration.

If you have rented out, you must declare the net income. The net income is the income you have left after you have deducted from the received income certain costs that are part of the subject letting or not.

What are the usual costs?

  • The compensation of the community
  • Invoices for utilities (water, electricity, gas, alarm system, TV, internet,...).
  • Residential insurance - IMPORTANT THAT YOU MUST NOTIFY RENT. Suppose your tenant causes damage to third parties or causes fire one will come to the owner!
  • Municipal tax (IBI)
  • Mortgage interest on the rented property
  • Costs incurred by the legal services for keeping your claim in order
  • Additional costs if you use a cleaning service, key management
  • Additional costs you incur for the promotion of your property
Expatgestoria Taxation News

Non-resident fees 2020

By dneutiens@segurantis.com

NON-RESIDENT FEES

FILES CLOSED

We report that the period for the adoption of files for the submission of non-resident fees (the modelo 210) for the taxable year 2019 has been closed. This year has not been an easy one and many customers have experienced problems because of the covid to obtain and/or send their documents.

An additional problem we were confronted with this year is that the tax authorities' system, through which we submit the declarations, did not allow us to enter an IBAN number. So a foreign account was not accepted. Only the Spanish accounts could be used. Customers who no longer have a Spanish account will have to transfer the tax due to our company account so that we can go to the bank in person to settle the tax ("the old fashion way").

DOSSIONS 2021

Clients who would like us to take over their file from their current tax representative or who would simply like us to keep their tax affairs in order can let us know, preferably before the end of the year, so that we can prepare your cancellation notice so that you can use it to terminate your contract.

TAX DUE

The annual rates for the calculation of non-resident taxes remained unchanged in 2020. However, there has been a slight increase in the cadastral value of real estate in 2019. So your tax due will be slightly higher. Please note that if you owned a full year in 2019 compared to the year 2018 in which you bought, you will undoubtedly have a higher amount during this declaration.

HONORARY

What is a positive point is that we have lowered our prices for claims by 25%. This is in order to give our customers a helping hand in these uncertain times and to do our bit. We also immediately reassure our customers that we will continue to maintain these prices in 2021.

Taxation Legal News

Become a Resident in Spain - Where do you start?

By dneutiens@segurantis.com

When are you resident?

This is a concept that often causes confusion because in Spain there are actually 2 forms of residency. The first form is the fiscal residency, which is the same all over Europe (information can be found on www.europa.eu => Income tax abroad) and the other form is the legal residency, which means that you will get a certificate (nowadays this is the green residency card) and with this you often have access to social security.

Everything starts with the departure

  1. You deregister from the local authority where you lived
  2. You contact your mutual health insurance company or health care providers and tell them that you have been deregistered
  3. You check with the local tax authorities or fiscal administration what you still have to do in terms of tax returns for the year you leave and afterwards if applicable (for example, retired civil servants this may be important).
  4. Your personal situation may require you to make additional arrangements before you leave - find out from your local authorities, pension service, benefits office, etc.

You register yourself with the Spanish local authorities where you are going to live

To be in order in Spain you will immediately be confronted with several steps which first have to be in order before you can obtain the resident card. Spain has a procedure which has to be respected and which has its requirements.

An important point that Spain currently checks is whether you can manage financially in Spain and that your health costs are covered in one way or another. There is also a stricter control on the correctness of the address where you live, where previously you simply went to get a Padron based on a simple application you must now clearly prove where you live and how you live there (deed or rental agreement).

Once you haveobtained the resident card, only then will these aspects come into play:

  • Registration with the national social security system (INSS)
  • Registration at the local "Centro de Salud"
  • Registration with the national tax authority (Hacienda)
  • Subscribe in the result / embassy
  • Registration of your vehicle(s)
  • Driving licence exchange

What can Segurantis do for you?

Go to the overview of our services.